Hat tip to Carrie La Seur at Great Plains Tar Sands Pipelines!
Council on Foreign Relations expert Michael Levi appears to be an objective observer of the Keystone XL pipeline debate. He has called some of the arguments against the pipeline ridiculous. He agrees with Ken Blanchard that Corynomics is crap and that Keystone XL should increase supply and thus lower oil prices. Levi sees no reason not to build the pipeline. Of course, Levi isn't having his New York flat seized by eminent domain.
That said, Levi doubts the job-creation claims TransCanada is using to sell Americans on its tar sands pipeline. TransCanada engaged The Perryman Group to cook up an economic impact study that finds Keystone XL would create 250,000 long-term jobs. Levi picks apart all sorts of assumptions in the Perryman report—e.g., increased rates of Canadian oil production depending on Keystone XL exclusively, market elasticity based strictly on U.S. rather than global consumption, rates of production not accounting for possible lower production from OPEC—and concludes that long-term Keystone XL job creation could be more like 40,000 or even as low as 7,000. And those numbers, says Levi, only stick if we assume that Perryman simply based its calculations on bad numbers rather than picking a really bad overall methodology.
Meanwhile, the Federal Communications Commission voted yesterday to redirect billions of dollars from the Universal Service Fund (some of those extra pennies you pay on your phone bill) to bring broadband to the 18 million Americans who don't have high-speed Internet access. The FCC estimates that in six years, its broadband project will create 500,000 jobs... without polluting any aquifers, surrendering any farmland to private Canadian corporations, or prolonging the American addiction to oil.
Amazingly enough, we are largely in agreement on the basic point here. I doubt that 250,000 long term jobs will really be created by the Keystone Pipeline alone. On the other hand, 7,000-40,000 is nothing to sneeze at in current conditions. These would be real jobs, payed for by actual economic production. I am similarly skeptical about the 500,000 jobs the FCC thinks its project will generate. Whatever the real number is, those would be jobs paid for by borrowing more money.
Well, if both TransCanada and the government are equally overly optimistic, the broadband project still creates twice as many jobs with a much cleaner project that directly improves the quality of life for rural South Dakotans. And the project is not paid for with borrowed money: it is paid for by a very specific funding mechanism.